PM: Labour will al­ways be against sec­ond pil­lar of pen­sions

The Labour Party will al­ways be against the Sec­ond Pil­lar pen­sion as pro­posed by the PN gov­ern­ment in past years, Prime Min­is­ter and Labour leader Joseph Mus­cat said yes­ter­day morn­ing.

Speak­ing at Zeb­bug, Dr Mus­cat re­vis­ited the prin­ci­ples be­hind this year’s Bud­get and in­sisted it forms part of a care­fully-planned se­ries which first aimed at sta­bil­is­ing the econ­omy and now is tar­get­ing sec­tors which could do with more help from the gov­ern­ment.

This gov­ern­ment has taken from no one, he said, and has given to ev­ery­one.

As re­gards pen­sions, to­day peo­ple pay in 10% of their earn­ings (bolla) while the em­ployer pays a fur­ther 10%.

With the sec­ond pil­lar as pro­posed by the PN ad­min­is­tra­tion, each em­ployee will pay in a fur­ther 4% of his salary while the em­ployer pays in a fur­ther 4%.

This will then build up a fund which on the strength of the col­lected 14% that are set aside, will give a higher rate of pen­sion.

But this would mean that an av­er­age worker will have his salary cut by a fur­ther €750 a year while a per­son on the min­i­mum wage will have his salary cut by €350. Em­ploy­ers too will have to fork out more.

This will only mean, the prime min­is­ter said, that many will pre­fer to work un­reg­is­tered and the black econ­omy would grow.

Those on min­i­mum wage have re­ceived an in­crease of be­tween €4, €9 and even €15 a week.

The Op­po­si­tion has raised hell just be­cause some toi­letries have in­creased by 2 cents. They would have re­tained the EcoTax but this proved to be very por­ous.

The gov­ern­ment wel­comes the dis­cus­sion launched on Satur­day that the min­i­mum wage must be in­creased. This pro­posal will now be dis­cussed by the po­lit­i­cal par­ties, the unions and the em­ploy­ers. If need be, the dis­cus­sion could be widened to in­clude COLA.

Malta is the first coun­try in the EU with free child­care and the first coun­try not just in the EU but also in the OECD coun­tries where pen­sions are not taxed.

Dr Mus­cat urged his sup­port­ers to speak to peo­ple about the Bud­get’s ben­e­fits. Even Car­i­tas has said that the Bud­get fo­cuses on peo­ple who do not have unions act­ing on their be­half.

Such peo­ple, as those who had what is called ‘pen­sjoni tal-wens’ for tak­ing care of a sick rel­a­tive and not work­ing out­side the home, have now been given €35 a week.

Be­gin­ning his speech, Dr Mus­cat said that change was the rea­son peo­ple en­trusted them with gov­ern­ment. Peo­ple must not for­get that up till a short time ago they did not have free child­care, nor did first time buy­ers get €5000 from the gov­ern­ment nor was In­come Tax brought down to its present lev­els.

Much has been done in th­ese three years but much re­mains to be done.

Yet peo­ple some­times do not un­der­stand, as a man who grum­bled he had been made to pay €2500 fine to reg­u­larise his house but then he could sell his house for €200,000.

A lit­tle-men­tioned scheme in the Bud­get comes from a time, three years ago, in MarieLouise Coleiro Preca’s time as min­is­ter, when a scheme was launched whereby peo­ple who owed big sums of money to the gov­ern­ment paid by means of prop­erty, after in­de­pen­dent vet­ting.

A lot of time was lost: in 2000 a pro­posal was made to link Malta to Europe through a gas pipe­line. Min­is­ter Josef Bon­nici was all for it but he was over­ruled.

It was Lawrence Gonzi him­self who came up with the In­ter­con­nec­tor idea but when this gov­ern­ment came to of­fice, it found that there were no per­mits for this yet.